It’s the scenario that every business dreams of when starting out – experiencing rapid success and reaching growth goals far quicker than anticipated.
Unfortunately, rapid growth can also be the stuff of nightmares for many businesses, creating a situation where resources, both human and financial, are stretched to their limits.
When a business grows quickly, it can create a wide range of competing demands for financial resources, from investing in more stock and supplies to needing money to hire staff, open new premises or to buy new equipment. This is termed as overtrading – where a business’ sales are growing faster than it can finance them.
All of these financial demands create pressure on cash flow, threatening to place the business in crisis.
It’s no secret that along with poor management, cash flow issues are the biggest contributor to business failure in Australia, particularly for small business and start-ups.
So the question is, how do you go about achieving rapid growth while ensuring you’re business remains financially healthy at the same time. The simple answer – it’s all in the financing.